WASHINGTON, D.C. — In news that clears the way for construction to start immediately, California-based NaturEner USA, LLC, secured a $320 million construction loan with Morgan Stanley for the189-MW Rim Rock wind power project in Montana.
NaturEner has advised its contractors to move forward with construction; the project is expected to be completed by the end of the year. The wind farm, which will consist of 126 Acciona AW-77 1.5-MW turbines, is located in Glacier and Toole Counties. Once the project is completed, San Diego Gas & Electric Co. (SDG&E) is expected to make a rather unique tax-equity capital contribution of approximately $285 million in the facility, an investment that both the California Public Utilities Commission and Federal Energy Regulatory Commission (FERC) have already approved.
“Rim Rock is an innovative project that is the result of tremendous effort not only from our team but also our partners at Morgan Stanley and SDG&E,” said Jose M Sanchez-Seara, CEO of NaturEner. “We have been thrilled with the broad support we have received for Rim Rock from landowners, ratepayer advocates, the Montana government, labor unions and other stakeholders. Rim Rock is our third Montana-based project, and we are excited to be building it this year.”
Under a “Green Attribute Purchase and Sale Agreement,” SDG&E will procure the renewable component of the Rim Rock output and use it to meet California’s Renewable Portfolio Standard or “RPS” goal, which is now 33 percent by the year 2020. The tax-equity investment, the first for a California regulated utility, is a unique transaction designed to pass through to SDG&E’s customers lower utility financing costs. Rim Rock’s wind power will contribute about 3.5 percent of SDG&E’s renewable portfolio per year.
Morgan Stanley is also the physical off-taker pursuant to a long-term fixed-price power purchase agreement. Power from Rim Rock is expected to be shipped within the Western Interconnection, encompassing several western states and Alberta and British Columbia. The project will have access to transmission via the Montana Alberta Tie Line using the 300 MW of transmission rights awarded to NaturEner during FERC-compliant open season processes conducted in 2005 and 2006.
Carl Levesque is the communications editor at AWEA. This article first appeared in the AWEA Windletter and was reprinted with permission from the American Wind Energy Association.